Wednesday, December 2, 2009

Adam Posen the new (USA) boy on the MPC

Is a hike in stamp duty and CGT the way to curb house price bubbles?

Bank of England newcomer Adam Posen believes governments should intervene directly in housing markets by taxing excessive house price rises. The US economist Adam Posen is the new boy on the Bank of England’s monetary policy committee (MPC) who obviously hasn’t learnt the golden PR rules of that august institution quite yet. The first rule is to ignore unsustainable house price bubbles completely on the way up, but then fret about them obsessively on the way down, because of their effect on consumer confidence and spending. The second is.....

Posted by jack c @ 05:42 PM (734 views)
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4 thoughts on “Adam Posen the new (USA) boy on the MPC

  • Mark Wadsworth says:

    “Is a hike in stamp duty and CGT the way to curb house price bubbles?”

    Nope. The way to curb those is to

    1. Replace as many taxes as possible (starting with council tax, business rates, stamp duty, inheritance tax, capital gains tax etc) with Land Value Tax or Property Value Tax.

    2. Instead of giving hard-fought planning permission (i.e. a one-off windfall gain of £100,000 to the landowner) to landowners, give every young person at the age of 25, as a kind of Universal Inheritance, planning permission for half a dwelling (so an average couple only has to pay for the bricks and mortar cost). You can swap your entitlement for a (new) council house if you’re not that into Home-Owner-Ism.

    3. Sensible supervision of banks, proper Basel/capital ratios and an end to taxpayer funded bail-outs, i.e. if banks get into trouble they get fixed via debt-for-equity swaps.

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  • Haven’t read the full article, but probably Adam P hasn’t got a load of property in the UK for his retirement like the other corrupt politicians. Great idea, but wonder if they will listen to him or send him packing.

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  • A hike in Stamp Duty will do nothing and it’s absurd to think it can. Average prices would go down by the amount of increase, but everyone would still have to pay the up-front cost to HMRC. Who will that penalise? Not the cash rich or middle classes willing to write big cheques to bag another BTL property; it will just make it harder on FTBs and the young. What we need are much higher taxes against BTL (including CGT) and Stamp Duty *exemption* for all FTBs up to a value of 200k.

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  • As a newcomer on the MPC, he won’t yet be familiar with the “fill yer boots” property wealth protection racket. No doubt he’ll fall into line in no time.

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